August 12, 2009

Philippine National Food Authority (NFA) has allocated more than PHP3 billion to buy corn from local farmers this year at a premium.

NFA administrator Jessup P. Navarro said the agency is targeting to procure 230,000 tonnes of yellow corn worth PHP2.8 billion and 65,000 tonnes of white corn worth PHP892 million until December this year.

Navarro said NFA had already bought 19,171 tonnes of yellow and white corn as of end-July.

NFA director for public affairs Rex C. Estoperez said corn procurement began in June, shortly after the government announced its corn procurement programme.

Estoperez said corn procurement is also in preparation for the government's commodity trading programme, explaining that yellow corn stocks in NFA warehouses will be sold next year to feed millers, and poultry and livestock farmers, while white corn will be sold for human consumption.

Yellow corn, the main ingredient in animal feeds, makes up nearly two-thirds of total domestic corn output, while the rest is white corn, which is used as rice substitute.

In May, the government increased corn buying price to PHP13/kg from PHP11.50/kg to encourage farmers to plant corn despite low prices in the market due to high imports of feedwheat, an alternative ingredient in feed milling. This was blamed on Executive Order 765, which cut feedwheat duties to zero from 7 percent from January to June 21.

It is the first time NFA bought local corn since 2006, when it offered to procure locally produced corn at PHP7/kg, but this was ignored by the farmers due to higher prices from traders.

US$1 = PHP48.030 (Aug 12)